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Washington Wine, Part 2: Ample Room For Growth

July 20, 2015

With winery revenues of roughly $1 billion and a U.S. market share of around 4%, according to the Washington State Wine Commission, the Washington wine industry has grown fast, moving from fewer than 20 wineries in 1980 to more than 850 today. In the calendar year-to-date through June 14, the category rose 10% to 1.9 million cases and 12% to $215 million in IRI channels, and key Washington players tell SND they see further growth on the horizon.

Retailers and restaurateurs are becoming more well-versed in Washington wines as the segment grows, says Andrew Browne, president and CEO of Precept Wine. “On- and off-premise accounts have bought into the category—that’s the litmus test,” he asserts. Wine buyers nationwide now demand offerings from specific Washington AVAs, adds Marty Clubb, managing winemaker and co-owner of the highly rated L’Ecole No. 41 label.

Washington still has wide-open spaces suitable for vineyards, and it gives winemakers a Wild West sense of possibility. “The Columbia Valley has hundreds of thousands of plantable acres, so the Washington wine industry has much room to grow,” says Bob Betz, winemaker and founder of Betz Family Winery in Redmond. “We’re not anywhere near the limit, and the industry isn’t a stress on the state’s natural resources at this time.” Meanwhile, Washington’s relatively low-priced acreage makes innovation feasible, and winemakers are more willing to take chances on varietals outside the mainstream, with Malbec among the less traditional Washington varieties showing promise. Betz points to the $23 million Wine Science Center opened last month at Washington State University Tri-Cities in Richland, which will focus research on the state’s unique growing conditions.

Ste. Michelle Wine Estates president and CEO Ted Baseler also predicts advances. “Plantings will increase—we’ll see tremendous growth in terms of both vineyards and wineries,” he says. “Washington’s elite wineries will go to the next level, where people pay top dollar for ageable Washington wines at auction.”

The growth potential in Washington has increasingly drawn investment from out-of-state wine companies, which have either purchased, launched or partnered with Washington wineries. Modesto, California–based E.&J. Gallo acquired the Columbia Winery and Covey Run brands in 2012, and now produces its Pölka Dot Riesling label in the state. Italy’s Marchesi Antinori and Ste. Michelle have long been partners on Col Solare, a Cabernet Sauvignon from the Red Mountain AVA, and St. Helena, California’s Duckhorn Wine Co. recently released Canvasback, also a Red Mountain Cabernet. Meanwhile, Purchase, New York–based Kobrand Wine & Spirits launched Mullan Road Cellars, a Columbia Valley red blend by St. Helena winemaker Dennis Cakebread, and Banfi Vintners’ Mariani family is active in the state with its VinMotion unit, led by the Pacific Rim brand.

 

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